H&M Arrives in Oz – A Welcome For Consumers But A Warning For Competitors

H&M Arrives in Oz – A Welcome For Consumers But A Warning For Competitors

After over a year of speculation and anticipation, the famous Swedish H&M fashion brand has opened its first doors in Australia. A well received launch in Melbourne this month has led to the promise of more stores opening soon, with Sydney likely to see the second store launch before the end of April. Their website will, however, offer their clothing deals and range nationwide, although at this stage it only offers browsing.

If the grand launch of their first store as well as the strength of their global brand is anything to go by, existing retailers in Australia should have good reason to be worried. H&M arrive with a strong reputation for putting consumers as their first and foremost concern; something that far too many local fashion and clothes retailers have perhaps put aside in favour of profits. With more international stores looking to break into the Australian market it is crucial that these retailers meet the challenge of the arrival of H&M fast or otherwise face the prospect of losing customers forever.   


Where do H&M's strengths lie?

H&M top designs and strong supply chain integration a winning mixH&M are well known for their dynamic approach to meeting both current fashion trends and the expectations of their customer base.

The company has total control of their products. Their staffs of in-house fashion designers are renowned for being able to change, adapt and create new lines in rapid response to changes in fashion or consumer preferences. New designs in the past have quickly been put in place in their own production lines and stocked in stores within days. This entire ownership of the supply chain is something that no current clothing retailer in Australia can claim to have or pass on the benefits of to consumers.

H&M Second Hand Clothe ExchangesAllowing customers to hand in their second hand clothes in exchange for discounts is another interesting service which H&M may bring to Australians, although there doesn't appear to be any confirmation on this just yet. In the UK though, customers can bring their own used clothes in-store and, depending on the condition, they are issued with a voucher entitling them to between £5 and £30 off their H&M purchases. On mainland Europe, customers receive a flat rate  of 15% off. The idea behind this incentive is H&M’s response to the fact that every year in the UK, for example, £1bn of clothing ends up in landfills and isn't recycled.


How does this compare to local retailers?

Many Australian clothing retailers, taking stock from external suppliers, are sometimes prone to select product lines and fashion ranges that maximise their profits more than meet the demands and expectations of customers. Up until recent years, they’ve had the protection of limited choice for consumers elsewhere, combined with a low level of expectation from consumers for stores to sell what they actually want to buy.

H&M are famous for being able to replace unpopular lines quickly, as well as to ensure that stock levels are increased to meet the demand of popular styles. So with a competitor of this size and possessing these abilities now on Australian shores, less dynamic local merchants are going to have to work even harder to keep up with the rapidly changing retail landscape at home.


What's the uptake of H&M likely to be amongst Australian shoppers?

The launch of H&M in Melbourne was greeted with a great deal of interest and enthusiasm. If the company can, however, sustain this initial curiosity about something new into long term success remains to be seen. The dynamics of H&M in being able to meet new fashions and demands are impressive, but if Australian consumers actually want rapid changing fashions is a matter that has yet to be tested. At face value H&M’s approach seems to be geared towards a better deal for consumers, and one that many consumers seem keen to try. Many, however, feel particularly loyal towards an existing brand or retail store, so the big challenge will be to lure that loyalty towards them.

To assist in this regard, H&M have apparently launched an "Australia Exclusive'' collection. According to H&M, this collection is a reflection of the ''Australian lifestyle'' for men and woman, intended to serve up an extra helping of stiff competition to both its local and overseas retail peers.


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